Are Biofuels the Answer? By: Catherine Clark Econ 539 Presentation 2.

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Presentation transcript:

Are Biofuels the Answer? By: Catherine Clark Econ 539 Presentation 2

Main Research Questions:  Will biofuels allow the U.S. to be energy independent?  Are they more environmentally friendly than the fossil fuels they will replace?  What are the unintended consequences of promoting biofuels on a national level?

What is a biofuel?  A biofuel is any biomass (feedstock) that can be turned into liquid fuel.  Ex. Corn has cellulosic material that is separated and processed to make ethanol.  Ex. Soybeans are broken down into alcohol which is then converted to biodiesel.

What is the Current U.S. Policy?  14 Provisions in the EPAct 2005 involve subsidies for biofuels.  The act encourages the USDA, DOE, & EPA to partner to create a biofuel that will be commercially available and priced competitively with petroleum fossil fuel.  Other policy goals include moving to a fuel source that is less polluting than fossil fuel.

Review of the Literature:  Hill et al. (2006) determined using life cycle analysis that corn ethanol is more polluting than just fossil fuels when mixed at high quantities for CO, VOC, PM10, SOx, NOx.  They also determined that soybean biodiesel is less polluting than diesel for VOC, CO, PM10, and SOx.  If we use all of the corn and soybeans grown to make fuel we could cover 2.4% and 2.9% U.S. ethanol and biofuel demand.

Efficiency of Some Feedstocks Net Energy Produced (%) Net Energy Produced (%) Fossil Fuel 80 Corn85 Soybean94.4 Virgin Timber 86 Newspaper73

What about using marginal lands?  Walsh et al. (2003) determined at a farmgate price of $1.83 per Giga Joule of energy, farmers with Conservation Reserve Program lands would benefit from growing biofuel crops instead of traditional crops.  Schneider and McCarl (2003) furthered this study to determine biofuels were the best way to mitigate excess carbon emissions if carbon sold for $70/ton.

Other Options  Jaeger et al. concludes that a gas tax or raising CAFE standards is a cheaper way to mitigate green house gas emissions than producing biofuels.

Concerns With the Literature:  It does not take into account excess pesticide or fertilizer use in growing crops.  It does not take into account how food supply will be affected when farmers are encouraged to sell traditional food commodities at higher prices to produce biofuels instead.

Conclusion:  Can biofuels make the U.S. energy independent? No. The best we can hope for is less dependence of foreign oil.  Are biofuels better for the environment than fossil fuels? We are not sure, but this is certainly not the cheapest way to reduce green house gas emissions.  Who is benefiting from the (politically attractive) billions of dollars currently subsidizing biofuels? You be the judge of that.

If you would like to learn more:  Aden, Andy, Rovert Wooley, and Mark Yancey. (2000). Oregon Biomass-to-Ethanol Project: Pre-feasibility Study and Modeling Results. NREL: National Renewable Energy Laboratory Publication.  Hill, Jason, Erik Nelson, David Tilman, Stephen Polasky, and Douglas Tiffany. (2006). Environmental, Economic, and Energetic Costs and Benefits of Biodiesel and Ethanol Biofuels. Proceedings of the National Academy of Sciences, 103(30),  Jaeger, William K., Robin Cross, and Thorsten M. Egelkraut. Biofuel Potential in Oregon: Background and Evaluation of Options. Forthcoming to Oregon State University Press.  Kemppainen, Amber J. and David R. Shonnard. (2005). Comparative Life-Cycle Assessments for Biomass-to-Ethanol Production from Different Regional Feedstocks. Biotechnology Progress, 21(4),  Kim, Seungdo and Bruce E. Dale. (2005). Life Cycle Assessment of Various Cropping Systems Utilized for Producing Biofuels: Bioethanol and Biodiesel. Biomass and Bioenergy, 29,  Schneider, Uwe A., and Bruce A. McCarl. (2003). Economic Potential of Biomass Based Fuels for Greenhouse Gas Emission Mitigation. Environmental and Resource Economics, 24,  Walsh, Marie E., Daniel G. De La Torre Ugarte, Hosein Shapouri, and Stephen P. Slinsky. (2003). Bioenergy Crop Production in the United States. Environmental and Resource Economics, 24,